Argos, Homebase and Habitat owner reports profits down for fifth year

Home Retail Group chief executive Terry Duddy hails 'good outcome to … challenging year' after 23% fall in profits

Argos has underlined the waning importance of the high street to retailers by revealing that more customers buy its products online and through click-and-collect services than by making traditional in-store purchases.

Profits at its parent, Home Retail Group, which also owns Homebase and Habitat, have fallen for a fifth consecutive year as the retail industry undergoes a transformation against a backdrop of weak consumer confidence.

Homebase stores will increasingly stock Habitat and Laura Ashley products.

 Home Retail Group reported a 23% fall in profit before tax to £99m in the 12 months to 2 March, with revenues broadly flat at £5.48bn.

Despite what he described a "challenging year", HRG's chief executive, Terry Duddy, said the transformation of Argos from a catalogue to a digital retail business was progressing, as he said like-for-like sales increased for the first time in five years, delivering a 2% rise in like-for-like revenues with underlying profits up 6% to £100m.

Duddy explained the key factor in growth was click-and-collect sales – where online purchases are collected in the shop – which now account for 30% of business.

He said: "If you go back to 2002 when we went from a telephone system for ordering products and went onto the internet for the first time, did I think that would now be 30% of our sales? No."

However, Homebase profits were washed away by poor weather last summer, with sales down nearly 5% and underlying profits halving to £11m.

With nearly £400m of cash in the bank and no debt, the company is pushing ahead with a three-year investment plan announced last October. Homebase stores will be given a facelift, and will increasingly stock products from Habitat and Laura Ashley, including a recently created range of Habitat paints, wallpapers and tiles.

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Article source : http://www.guardian.co.uk